This is a CU Colorado Springs student blog for the following courses: Intermediate Microeconomics and Austrian Economics.

February 28, 2013

Interventionism

Both political parties widely mischaracterize the
foundations of the two economic systems of capitalism and socialism.In the our modern society the average citizen who is pro capitalism
would say that they haven’t seen pure capitalism for multiple decades, but in
all reality we haven’t had pure capitalism or capitalism without any government
intervention ever.When capitalism was
at its founding roots with little to no force included we find that there were
major consequences for many people and large chunks of the society do to the
lack of protective property rights.For
this reason the majority of America supported regulated capitalism where force
(government) enforced protected property rights and embraced the lack of
predation on society in order to have the nation prosper.

Unlike the interventionist type of
government we have now, in the 1800s the force for the most part stayed out of
the economy.For this reason, many of
the tycoons we know about today made a fortune by monopolizing a corner of the
economy or running cartels.On the flip
side, this unregulated capitalism also led to unintended consequences whether
it be bubbles, financial issues or destitution; we don’t see these issues as
frequently in our modern century where force intervenes into the economy.For many of these reasons we have seen
multiple reforms in the government/economy through mainly public pressure that
resulted in a regulated free-market economy.This monumental reform that started in the early to mid 1900’s helped to
break up the massive monopolies comprised by the tycoons of the economy who
were making fortunes off of over charging the masses or whole society.The momentum behind the wave of regulatory
agencies that grew out of the great depression was from the enactment of the
Federal Reserve and income tax that the congress created at the beginning of the century.Where I think the two parties did come together
a little bit on regulated capitalism is in the twentieth century; both parties
helped sign legislations that promoted government regulated agencies to oversee
common things such as food, business centers, ecosystems and medicine
production.Although capitalism in this
country is still based on the foundation of private ownership and fluctuating
prices through free markets; our current system is layered with rules and
regulations to help alleviate people from abusing the system by protecting
property rights and implementing regulations.

There will always be critics who
think the government uses too much force, or intervenes in too many areas of
the economy/market; especially when you hear people talk about Obama, I hear
some people say that they think he is implementing a system more like socialism
rather than capitalism.But in my
opinion wouldn’t you call that regulated capitalism or interventionism, in
which I believe we need in our economy in order to have a more efficient
country.Obama’s health care reform is
obviously a hot topic that people like to critique, but it’s plain and simple
that a plan of this magnitude will have to have more government involvement in
order to deliver his vision of nationalized health care for better or for
worse.In my opinion it doesn’t seem too far
from what we have experienced in the past decades as far as someone or somebody
touching the force to regulate our health care and in this case I believe it
is/was the insurance companies.Furthermore, these companies (insurance corps.) failed to use the force
adequately and failed to keep our medical cost down as wells as available so the government had to
step in; again I’m not implying that Obama’s new plan is a good idea, just
simply that either way force was involved and somebody behind the scenes was
using the long arm of the government to regulate healthcare.Ultimately, when we are dissatisfied as a
country with a particular system/issue we partake in public pressure that leads to
more government intervention.

What we have today in our current
political system is regulated capitalism or what we like to call
interventionism, and anybody who has read up on socialism or understands
socialism should see that we are not a socialist nation.Although, I will agree that continued
intervention by the government can, but not always or certainly lead to
socialism.We have to understand that if
we were a socialist country then the government would control all the
production factors such as industry rights and property rights.Furthermore, as a society we would earn less
income because the force would determine what are nationalized wage would be; I
do see minimum wage acting in this way a little bit but the government still
doesn’t own all of our factors of production which is very important.We have to keep in mind that we can’t be a socialist
nation yet because many of us work in the private business sector, even though
there are some people who do work for the government but not all!To expand on our incomes or wages, the
government doesn’t set them; we set our wages by our ability to display our
skills and how we can convince a company to pay us more for our services not
the government.Keep in mind we don’t
only convince the business, we also convince the customers because they are two in
one.Concluding, if you have money then
you can buy things and the things you buy can and are protected by the
government through protected property rights in which helps us prosper, if the
government didn’t do this then we wouldn’t prosper and we would be closer to
socialism.This is the fine line between
capitalism, interventionism and socialism.

As you can see the concepts between
capitalism and socialism can be unclear and a little difficult to
differentiate, for this reason continued battle/arguments between these two
social issues will only continue to intensify and be magnified.The U.S. government continues to borrow money
to cover our living cost in order for us to reduce our social cost.For example the cost of our government
programs such as Medicaid, Medicare and Social Security.The increase in costs for these government
programs will only lead to greater pressure on our society to make tough
choices; Choices like whether we should/have to pay more than the previous
generation just to support the needy, underprivileged and elderly senior
citizens thus creating unjust effects on intergenerational groups (intergenerationally unjust) .If we (government) were to decide not to
support these programs then the benefits these groups receive would diminish
rapidly.On one side of the argument we
are kind of socialist through our actions to transfer wealth from one group to
another; but on the other hand we are very capitalistic by are individualistic
behaviors that lead to reduce safety nets for the needy, underprivileged and
elderly.Ultimately, the result of our
government regulation and individual actions lead our nation to stand somewhere
between true capitalism and pure socialism.I think right now our country lands somewhere between these two social
systems, a system we can identify as interventionism.But as we grow and the government continues
to intervene we could end up much closer to true socialism than we could have
ever predicted.Yet, I believe in order
for us to prosper and continue growth in our standard of living government must
intervene a little bit to protect our property rights and continue our system
of interventionism with precaution to socialism through overuse of force. By precaution to socialism through overuse of force I mean government intervention can/does have a domino effect so even if the government stopped using force right now we would still see and feel the effects of government policies through force that were implemented days, years, decades and centuries ago. This effects still leaves us with a regulated form of capitalism or interventionism that can creep closer to socialism.